07/05/2012 05:10 pm ET

Hollywood Video's Debt Collectors Allegedly Demanding Bogus Late Fees

In an era of Netflix, you might think being hounded to pay late fees on video rentals a thing of the past. You would be wrong.

Consumers have filed more than 1,400 complaints to the Better Business Bureau in the past year alleging two debt collection companies are going after them on behalf of now-bankrupt Hollywood Video to pay late fees they don’t owe, according to The two companies, West Bay and Universal Fidelity, are working on behalf of the trustee in charge of Hollywood Video’s bankruptcy, and, in most cases, they’ve stopped pursuing the debts once consumers disputed the claims.

Movie Gallery, Hollywood Video’s parent company, filed for bankruptcy for the second time in three years in 2010 and shuttered a third of its stores.

The collection companies present consumers with notices featuring video titles that in many cases the consumers don’t recognize. One Nevada woman said she received a notice claiming she owed $140 in late fees for 15 videos, only some of which she watched. Another Houston woman says she had a similar experience.

This isn’t the first time collection companies associated with Hollywood Video have been accused of harassing consumers. Attorneys general in at least six states said they were last year getting complaints about National Credit Solutions, a debt collection company looking to recoup Hollywood Video late fees, MSNBC reports. More than one percent of Montana’s population was affected by the scam, according to the state’s attorney general.

In 2011, NCS reached a settlement with all 50 states and Washington, D.C., agreeing to stop some of its most egregious practices including charging double for late fees, submitting credit reports on Movie Gallery customers and collecting interest on the late fees.

It may come as little surprise that debt collection companies are using aggressive tactics to recoup fees. Collectors have been increasingly using lies, threats and insults to collect debts, according to an April report from Marketdata Enterprises.